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07 July, 2015

Coffee Shop Conundrum - ECJ Set to Decide on Free WiFi and Third Party Liability

In a time when the internet is nearly always with us, be it in a smartphone, a laptop or other smart devices, you often taken things for granted such as free WiFi. For many travelers it has saved their behinds from being lost, out of money, or in some unfortunate cases, even potential harm, and many of us in bigger cities like London can easily overlook the need for WiFi. But, as Uncle Ben framed it so eloquently: with great power (i.e. Internet connectivity) comes great responsibility. People can be inconsiderate, and at times outright indifferent, to potential liability issues in using other peoples' or organizations' free WiFi, which begs the question: can a third-party be liable for possible infringement on their wireless network?

The answer to the question possible lies in the forthcoming decision of McFadden, faced by the European Court of Justice later this year (this writer hopes). The case, refereed to the ECJ from the Regional Court of Munich (decision in German can be found here), concerned a store owner, Toby McFadden, in Germany who's store specialized in light and acoustic engineering services. To further promote the store and its offerings the owner allowed potential customers to freely access a WiFi connection, with no password protection included. An unknown user used this free network to upload and share an infringing song on an online file-sharing platform, and Mr. McFadden was subsequently sued by Sony Music who argued he is liable for the infringement (among other things) that occurred on his unprotected network.

The case does bring forth several questions concerning Article 12 of Directive 2000/31/EC, more commonly known as the E-Commerce Directive. Although each of the questions merits an assessment in their own right, for the sake of brevity this writer shall endeavor to answer the question above, at least in the light of Article 12.

Wifi can cause some degree of envy

What Article 12 seeks to protect are service providers, or in other words 'mere conduits', who provide a service such as free WiFi, should they remain largely hands-off of the provision of that network (i.e. don't cherry-pick the users accessing the network, don't initiate the transmission of information or alter what is received in some way). This, however, cannot be a service for which the provider is remunerated, per Recital 18 of the Directive, and aims to facilitate the better sharing and access of information within the European Community.

This writer will freely admit his lack of knowledge in German law, but proposes to give a perspective from the UK side of things. Pinsent Masons in their Out-Law blog have set out that, per German law, individuals have to secure their internet connections through reasonable means, such as a password, to avoid liability should a third-party use their connection for nefarious purposes; however, this standard does not extend to commercial entities, which the case aims to settle.

Under the Copyright, Designs and Patents Act 1988 the High Court has the capability to issue an injunction against a service provider, provided that the "...service provider has actual knowledge of another person using their service to infringe copyright". What this has been interpreted in Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc to encompass is true knowledge of one or more infringers using the provided network to do so, and the more detail of knowledge or facts given to the service provider (notices etc.) the less protection the provision offers to them. One could argue that a lack of password protection would not in itself give rise to an actual knowledge of possible infringement, as users, even if filtered through via password protection, could still abuse the network without the knowledge of its provider.

Whether Mr. McFadden was brazenly aware of the infringing acts being committed on his network is unknown to this writer, and he awaits the decision of the ECJ with some interest. Voices have been raised in the protection of open networks and access thereto by entities such as the Electronic Frontier Foundation, and one must agree with them to a certain extent. The 'locking down' of networks does provide a more cumbersome regime through which information and the Internet can be accessed, but one still does have to keep in mind the protection of legitimate rights within that space. What the ECJ decides will undoubtedly have ramifications on our WiFi networks, but one can imagine they'll only remain a login away.

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IP Iustitia is a blog that discusses intellectual property law (and associated topics), attempting to decipher IP law for those who engage with it once in their life, on a daily basis and anywhere in between.

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The Author

Jani Ihalainen (LL.B. (Hons), LL.M.), is a law graduate with a passion for all that is intellectual property law, residing in London, UK.
He also currently works for an international law firm in the City of London.

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